Subscriber Identity Module cards are making their debut in the United States as important tools to help personal communications service carriers penetrate the market.
SIM cards contain all the subscriber-related data needed to make a call so that any telephone can be used. A plug-in SIM card is designed for smaller phones and can be removed, but not easily. A larger credit card-sized “smart” card contains far more intelligence and can accommodate multiple subscriptions for a family or a business, as well as other subscriber information.
The industry standard is an 8 kilobyte, 5 volt card for Global System for Mobile communications or PCS 1900 phones. The cards can be purchased by a carrier for about $10 apiece in bulk.
Schlumberger Electronic Transactions-which introduced the technology in France 15 years ago as a token card for pay phones-just released a 1k SIM card that it says will cut the cost in half and open up distribution channels for PCS carriers.
“The new card is so cost effective*…*that it allows cards to be treated as low-cost promotional tools to win new users,” the company said.
Company spokesman Richard Peck noted that carriers can sell subscriptions without the handset to increase their channel options. “It’s a lower cost to mail a SIM card than to mail the phone.” he noted. The card need only contain a speed dial to connect with the PCS operator to activate service.
The larger card also provides an opportunity for co-marketing PCS service and other services, like banking, Peck said. “The card acts as a mini-billboard to help build brand name and company logo. It helps raise exit barriers and reduce churn,” he said.
Chris Landes, a marketing consultant at Verona, N.J.-based TeleChoice Inc., noted that a SIM card can only contain a limited telephone directory, but the larger smart card can offer a variety of call management services tied to that one number, including corporate billing information.
“One of the beauties of the card is you can check into a hotel, borrow a laptop computer and have full services-fax, messaging, etc.-that you would have access to on your desktop,” he said.
Landes also noted the advantages of using smart cards to fight fraud. “Smart cards are not brain surgery-the technology is available now-but they are expensive to duplicate. The intelligence is on the chip that’s resident in the card. A fraud shop probably can’t crack those codes,” he said.
The use of SIM/smart cards has been touted as a competitive advantage by the builders of PCS 1900 networks in the United States, but carriers who have chosen Code Division Multiple Access technology are less enthralled. “There’s not a lot of support for it from the 45 companies-including both manufacturers and carriers-in the CDG,” said Perry LaForge, executive director of the CDMA Development Group.
In the near term, LaForge said the over-the-air activation capability of CDMA surpasses that of smart cards. “It does everything we want it to do, including fraud control,” he said. But LaForge noted that in the long term, smart cards may provide co-marketing opportunities for CDMA carriers.
